Tyneside jeweller failed to disclose US assets, joint trustees say

A Florida court has recognised a British jeweller’s bankruptcy after his joint trustees Grant Thornton found he had lied about his US property portfolio before an English court.

In an order on 15 November Judge Catherine McEwen, at the US Bankruptcy Court for the Middle District of Florida, granted emergency relief to Grant Thornton partner Nicholas Wood and director Colin Diss, who were appointed as joint trustees of Darren McCormick in May this year.

McCormick is a jewellery distributor based in Newcastle-upon-Tyne, a city in the UK’s north-east England region. He is the director and shareholder of locally incorporated company Darren McCormick Jewellery.

Hong Kong-based watch company Zero Time Product Design International filed for a petition for McCormick’s bankruptcy in December 2018, after he failed to pay a debt he owed to them. McCormick failed to appear at the bankruptcy hearing and in April 2019 District Judge Michelle Temple, in the County Court of Newcastle-upon-Tyne, declared him bankrupt. The court appointed Diss and Wood the following month.

In their petition before the Florida court the trustees said McCormick had transferred £83,000 (US$107,000) from two UK pension funds to his US bank account in Florida in January.

In a signed declaration before the Newcastle court in July, McCormick said the withdrawals from the pension funds were, “to fund a dental cosmetic treatment and cell injection therapy” he had been receiving in the US and denied owning property in the US.

But an investigation by the joint trustees found that he in fact owns a property in Rockwood, Tennessee, and had recently owned two in St Petersburg, Florida. One of the properties McCormick had owned in Florida, which he claimed he sold for US$236,000, had in fact been sold for US$255,000. It found he had sold the second to DMJ Trading, a Florida company he owned, for US$10. Diss told the court the third property was valued at US$349,600.

The joint trustees deduced that McCormick had lied about his US property assets to thwart their ability to realise his US assets.

Based on these findings the joint trustees said “we know that the Debtor’s sworn declaration, stating that he owned no property in the United States, is false”.

In March, after McCormick learned that bankruptcy proceedings were pending against him, he transferred ownership of his primary residence in Newcastle to his ex-wife, although he continued to live in the property rent-free with her permission.

McCormick then transferred £14,000 (US$18,000) from his US bank account to another one of his creditors American Express. Diss told the court he had later transferred his controlling interest in two companies to a third party “for no apparent consideration”.

He said that following Chapter 15 recognition he expected to be able to identify additional assets belonging to McCormick in the US.

 

In the US Bankruptcy Court Middle District of Florida Tampa Division

In Darren Bernard McCormick [Case 8:19-bk-10768-CPM]

Counsel to Foreign Representative

  • Sequor Law

Shareholder Leyza F. Blanco in Miami

Joint trustees and foreign representatives

  • Grant Thornton

Director of asset and recovery team Colin Diss and partner Nicholas Wood in London

County Court at Newcastle Upon Tyne

Between Zero Time Product Design International and Darren Bernard McCormick.

  • District Judge Michelle Temple

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